PETROL dealers are in the dark over the issue of fuel ceiling price which has been steadily increasing since mid-November 2020.
Without a ceiling price, petrol station operators’ cashflow will remain tight as they will have to buy fuel at higher prices, making the cost of holding stocks more expensive, said the Petrol Dealer Association of Malaysia (PDAM).
Its president Datuk Khairul Annuar Abdul Aziz said currently, station owners have yet to recover their losses from the previous enforcement of the Movement Control Order (MCO) in March 2020.
The stay-at-home orders, he said, have swiped at least 70% of their business revenues.
“Sales dropped by 70% when the MCO was called, but dealers managed to slowly recover in October last year, with sales picking up to about 80% compared to the pre-MCO period.
“So, now that the fuel price is going up, we need to know if the ceiling price is in place or has been revoked.
“If there is no ceiling price, dealers will hold expensive stock while demand is again affected in MCO 2.0,” Khairul Annuar told The Malaysian Reserve (TMR).
In June last year, several media agencies reported that the Domestic Trade and Consumer Affairs Ministry (KPDNHEP) had revoked the petrol price control order which restricted the maximum price of RON95 to RM2.08 per litre and diesel to RM2.18 per litre.
The revocation was announced in a federal gazette titled Price Control and Anti-Profiteering (Determination of Maximum Retail Price for Petrol and Diesel) (No 8) (Revocation) Order 2020 which was dated June 3, approved by KPDNHEP Minister Datuk Alexander Nanta Linggi on April 10.
Nanta Linggi clarified that the order on ceiling retail prices of petrol and diesel is still in place.
He stated that it was actually a change in mechanism to improve the monitoring and enforcement efficiency to counter any violation under the Control of Supplies Act 1961.
However, since then, petrol dealers have been kept in the dark, Khairul Annuar said, who demanded KPDNHEP to clarify the matter.
“Now, we are not sure if there is any price capping for the fuel price as the government will need to subsidise it,” he said.
The previous Pakatan Harapan government had set the ceiling price for RON95 at RM2.08 per litre and diesel at RM2.14 per litre.
RON95 was traded at the high of RM2.08 per litre on March 6, but the price had dipped to the lowest in early May at RM1.25 due to the MCO.
The price has fluctuated since and steadily went up from RM1.61 on Nov 13 to the current price of RM1.90.
Nanta Linggi stated the ministry will only intercept the fuel price through a mechanism when it goes up to a certain level.
A source in the government told TMR that the price ceiling mechanism is still in place and the new price ceiling is expected to be announced by the Finance Ministry.
Meanwhile, Khairul Annuar said more than 10 PDAM members decided to close shop last year due to the tough economic climate caused by the MCO and Covid-19 outbreak.
“Some station operators surrendered their dealership to the oil company and dealers who owned businesses have closed down their stations,” he said.
Khairul Annuar said a ceiling price would allow petrol dealers to breathe, as the current MCO is causing losses like the previous lockdown, especially for those operating at highways.
Although the January 2021 MCO allows some sectors to operate, interstate travelling is still restricted.
If the government introduces a lockdown like last year, Khairul Annuar said all petrol dealers will be bleeding in the next couple of months.
“It must be noted that the petrol dealer business is essential.
“Even during spikes of Covid-19 cases, we need to open our doors.
“For example, while the Johor and Singapore borders are closed, petrol stations at the Second Link must continue to operate; however, there is no business there,” Khairil Annuar said.
He added that even though petrol stations are running at a loss, they cannot close.
“It is important for the business to survive and continue supporting the economy,” he said.
PDAM represents some 3,800 petrol dealers nationwide.
Source: The Malaysian Reserve
